Friday, oil prices tumbled as a result of the dollar climbing versus major currencies and since commodities are priced in dollars, oil became expensive for traders therefore reducing the appeal for black gold markets which weighed on oil prices heavily causing them to close below the $70 per barrel. The contracted last week shed $2.65 closing at $69.29 while recording a high of $72.90 per barrel and a low of $68.82 per barrel.
Today, oil prices extend their decline as there are concerns in the markets that prices have climbed too much regarding a global recovery and this meant that there is still weak oil demand as a result of the ongoing global recession which led to investors stepping of oil markets, while funds flew out of the markets, therefore prices plummeted. The markets today opened at $68.15 while recording a high of $69.35 per barrel and a low of $68.05 per barrel.
Investors currently not only eye the weak demand and rising dollar but also they have some attention towards the stock market because a weaker stock market means that companies production in the long run will be lower therefore meaning weaker demand on oil. As long as the global recession persists, oil markets are pressured therefore prices will resume their downwards decline.
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